Markets have stopped falling, Bank of Japan, US companies, cryptocurrency, elections in Venezuela
Market Reviews
• Global stocks extended gains, reversing last week's wave of sell-offs as investors leveled positions ahead of a wave of economic data, policy decisions and earnings reports that will weigh on the market later this week. There didn't appear to be anything in the near future that would have a major impact on Asian assets on Tuesday, with Wall Street mixed as the dollar rose and Treasury yields fell. This suggests that regional markets will be relatively well supported, but will be range-bound.
• Labor market data from Japan, housing and retail data from Australia, and a range of earnings reports including from Standard Chartered, Nomura Holdings and Samsung are the key regional developments that investors will be paying attention to. Asian shares appeared to have reversed recent declines, with some benchmark indices posting their best day in two weeks on Monday, with the MSCI Asia ex-Japan index up 0.7%, the Hang Seng up 1.3% and Japan's Nikkei jumping 2. 1%. It was the Nikkei's best day since April, an impressive rebound from a three-month low, but was followed by eight days of continuous declines, its worst performance in nearly three years.
• The recent shift from U.S. large tech companies to small-caps has stalled as the Russell 2000 has lagged far behind tech companies and the Nasdaq as a whole. The S&P 500 rose just 0.1%, a tiny gain but the first time in two weeks that the index rose for two days in a row.
• The Bank of Japan's policy decision on Wednesday has more implications for Japanese assets. Sources told Reuters a rate hike would be discussed and policymakers could also unveil a plan to roughly halve bond purchases in coming years. Money market pricing for the BOJ's decision remains biased toward a 10 basis point rate hike, but tightening will be slow, with only 20 basis points of rate hikes priced in by year's end. If the "normalization" of policy in Japan is so gradual, it will be difficult for the yen to get much upside from Tokyo. It could get more support from the US Federal Reserve and other central banks, which will cut rates more aggressively than markets currently expect.
• U.S. rate futures traders are betting the Fed will stay put on Wednesday, begin easing in September and cut rates by about 65 basis points before the end of the year. The Bank of England meets on Thursday and may cut rates. The dollar rose to a two-week high against a basket of major currencies on Monday, breaking above 154.00 yen as Wednesday's Federal Reserve and Bank of Japan meetings approach. Asian currency markets are mostly subdued, while the Chinese yuan is also taking a breather.
• NVIDIA is cutting the production of gaming cards by 50%, Taiwanese media write. The company needs capacity to produce AI chips.
• An explosion occurred at BASF's largest chemical plant in Germany in Ludwigshafen, 14 people were injured - Bild. BASF is called Germany's largest chemical company. It produces chemicals, plastics and crop protection products.
• Apple plans to begin rolling out Apple Intelligence to customers as part of software updates coming in October. This means that AI features will arrive a few weeks after the initial releases of iOS 18 and iPadOS 18, scheduled for September.
But unexpectedly, beta testers will be able to evaluate the first functions next week - Bloomberg.
• McDonald's faces its first global sales decline since 2020 - FT. The reason is that consumers around the world are unhappy with the high cost of burgers, fries and drinks. While quarterly revenue of $6.49 billion was little changed from a year earlier, net income fell 12% to $2.02 billion, missing Wall Street expectations.
• Bitcoin is approaching $70 thousand amid a major conference in the USA. Edward Snowden warns the Bitcoin industry not to trust politicians seeking votes: "Vote, but don't join a cult," he warned. "They are not of our tribe."
• Ether ETFs experienced $340 million in outflows in their first week of trading. Nine US ETFs holding the cryptocurrency Ethereum suffered $340 million in outflows in their first week of trading as investors daily withdrew money from an old high-fee product that was converted into an exchange-traded fund.
• Brent oil fell below $80 amid concerns about weaker demand - Bloomberg. Oil fell to its lowest level in seven weeks on doubts about the strength of global demand, while investors await an OPEC+ meeting for supply guidance.
• Netflix holding investors are calling for a possible first issue of blue chips. On Monday, Netflix Inc. has approached investors about the possible sale of its first high-grade bonds.
• Vitol paid out a record $6.5 billion to traders after booming profits. Further evidence of how the energy crisis has brought spectacular wealth to global commodity traders.
• Buffett continues to sell his stake in Apple (AAPL) - media
- Shares yesterday at the stock exchange session after reports:
MCD +3%
ON +11%
PHG +11%
L -2%
- Shares in the morning after reports at the stock exchange session
EQR +1%
WELL +0%
SBAC -3%
• Yesterday stock indices closed neutral. The market is anxiously awaiting waves of reports, the Federal Reserve and labor market data.
Stock index futures are down slightly. Stock indexes in Japan and Gokonzi are down 1%.
Today reports
- Advanced Micro Devices, American Electric Power, American Tower, Arch Capital Group, Archer-Daniels-Midland, Arista Networks, CenterPoint Energy, Corning, Ecolab, Electronic Arts, Extra Space Storage, FirstEnergy, First Solar, Gartner, Howmet Aerospace , Illinois Tool Works, Live Nation Entertainment, Match Group, Merck, Microsoft, Mondelez International, PayPal Holdings, Pfizer, Phillips 66, Procter & Gamble, Public Service Enterprise Group, Public Storage, Qorvo, S&P Global, Skyworks Solutions, Smurfit WestRock, Starbucks, Stryker, Sysco, Xylem and Zebra Technologies.
- The Bureau of Labor Statistics publishes studies of job openings and labor turnover. The consensus estimate is 8 million vacancies on the last working day of June, 140,000 fewer than in May.
- S&P CoreLogic releases its Case-Shiller National Home Price Index for May. In April, home prices rose 6.3% year-on-year, according to the index.
- The Conference Board publishes the consumer sentiment index for July. The rate is expected to be 99.3, which is about one point less than in June.
Fundamental Reviews
• Israeli Foreign Minister Israel Katz reminded Turkish leader Recep Tayyip Erdogan about the fate of Iraqi dictator Saddam Hussein. “Erdogan is following in the footsteps of Saddam Hussein and is threatening to attack Israel. Let’s just remind him what happened there and how it all ended,” Katz emphasized.
Thus, Israel Katz responded to Erdogan’s statements about the possibility of Turkey’s invasion of Israel.
Let us recall that Saddam Hussein was executed in 2006.
• Venezuela is on fire The Central Electoral Commission announced that Nicolas Maduro received 51% of the votes. His opponent, opposition leader Gonzalez, allegedly has 44%. However, according to the exit polls, Gonzalez won by a large margin.
Massive cases of theft of ballot boxes from polling stations by pro-government gangs are reported.
The day before, Maduro said: “If you do not want Venezuela to plunge into bloodshed, into a fratricidal civil war because of the fascists, let us ensure the greatest success and the greatest victory in the electoral history of our people.”
Argentine President Miley said that Argentina does not recognize “another fraud” and hopes for the transition of the Armed Forces to the side of the people and democracy, and not the defense of the socialist regime.
Chinese Foreign Ministry spokesman Lin Jiang congratulated Maduro on his election victory.
Venezuela's opposition says it has evidence of its candidate's victory over Maduro in a disputed election
Gonzalez and opposition leader Maria Corina Machado told reporters they had received more than 70% of the vote count reports from Sunday's election, and they show Gonzalez winning by more than two times more votes than Maduro. Both urged people, some of whom protested for hours after Maduro was declared winner, to remain calm and invited them to gather peacefully at 11 a.m. Tuesday to celebrate the results. Maduro said: “In Venezuela, there is once again an attempt to carry out a coup d’état of a fascist and counter-revolutionary nature.” “We already know this film and this time there will be no weakness,” he added, declaring that “Venezuela law will be respected.”
As of Monday evening, election authorities had not yet released vote tally sheets for each of the 30,000 voting machines. The election authority's website was closed and it remained unclear when vote count results would be available. The lack of vote count results prompted an independent group of election observers and the European Union to publicly call on the organization to release them.
Maduro's next move is key as the US and Brazil question his victory - Bloomberg
Nicolas Maduro is trying to overcome international skepticism over his claim of victory in Venezuela, with all eyes on how aggressively he responds to the opposition's claim that he stole the election/
• The Polish Foreign Ministry proposed that Hungary withdraw from the European Union. The deputy foreign minister called Orbán's policies "anti-European, anti-Ukrainian and anti-Polish."
• The EU is preparing a two-stage strategy in the field of trade with the United States in the event of Donald Trump winning the election - FT
Brussels plans to propose an increase in purchases of American goods to balance the trade balance between the EU and the United States, the publication noted. If Trump does introduce the promised 10% tariff, the EU is ready to respond by increasing duties to 50% on certain US goods.
• Israel will not fully invade Lebanon after shelling of the Golan Heights - Ynet. The agency, citing senior Israeli sources, claims that the intensity of fighting between Hezbollah and the IDF will increase only for a few days.
A full-scale Hezbollah attack on Israel could overwhelm the Iron Dome system,
causing massive damage to cities like Tel Aviv, as Hezbollah has many more rockets and shells than Hamas - The Times
• New sabotage in France: telecommunications networks damaged. Fiber optic networks of several telecom operators were damaged in six regions of France. However, Paris, where the Olympic Games are currently taking place, was not damaged.
• If Trump wins in November, some European countries may retreat from the confrontation with Putin and stop supporting Ukraine, - Politico. A potential Korean war would cost the world twice as much as Russia's invasion of Ukraine - Bloomberg
Analysts predict that hostilities could lead to the death of millions of people and cost the global economy $4 trillion during its first year.
• At the same time, Bloomberg rates the scenario of military confrontation between South and North Korea low.
North Korea may conduct nuclear tests before the US elections to “increase its authority” - Bloomberg
North Korea has completed preparations for the test.
• Joe Biden wants to abolish immunity for former US presidents who committed a crime while in office.
He believes that no one is above the law.
This was preceded by the decision against the 45th President Donald Trump in the case of the storming of the Capitol in 2021.